Charlie Kelly, Sr. Director Remedy Consulting What is a Core Vendor - - PowerPoint PPT Presentation

Presented by:

Charlie Kelly, Sr. Director Remedy Consulting

 What is a Core Vendor Selection?  Ten Steps to a Successful Systems Selection  Negotiating your Best Rate  Project Timing and Contract Dates  Wrap up and Q&A

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Core-Vendor Hosted: ECommerce Mobile Banking Statement Processing Debit/Credit Core Systems Item Processing/Fed Submittal

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Internally Hosted: COLD/Image Repository Management Reports/Data Warehouse Best-of Breed solutions Commercial Loans FIS JHA Fiserv CSI Cardinal/ Shazam COCC Core Vendor Hosted

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(HS/LP) Least likely to de- convert (HS/HP) Lukewarm- would like price reductions (LS/LP) Lukewarm- Vendor may be stifling FI growth (LS/HP) Most likely to de- convert

High Satisfaction Low Satisfaction Low Price High Price

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• 1. Define the gaps
• 2. Decide who/how decision will be made
• 3. Provide RFP info/receive demonstrations
• 4. Quantify and make a decision

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 Sr. Management  Power Users  Decide upfront how decision will be made  Establish high level project dates  Form sub-committees of functional individuals to

assist with RFP

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 Think of this as a gap analysis:

• Likes-current vendor
• Dislikes-current vendor
• Where can we be more efficient?
• New product must-haves

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 Decide, prior to RFP, what the scoring criteria will

be.

 Survey the Systems Selection Committee and see

what is important to them

 Your ultimate goal is to come up with a score for

each vendor invited to bid.

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Category Description Weight Integration and Flexibility

• If the Vendor does not offer a product, integration options to 3rd party products.
• Willingness to offer a third Party’s products.
• Real Time integration vs. Batch integration.

40% Functionality/ Ease of Use

• Workflow necessary to complete daily functions
• Robustness of Vendor’s current offering
• User’s perception of Product Roadmap- future deliverables
• Reinvestment and history of delivering on Product Roadmap

5% Stability/ Support

• Ability to Implement/Convert
• Responsiveness of Account Executive
• Positive or Negative impact on Client’s customers.

5% Architecture

• Underlying infrastructure, network, technical platforms
• Ability for Client to write to API’s for third party offerings
• Integration of Vendor’s Ancillary systems
• Ability of Vendor to support and improve upon the current Architecture

30% Price

• Remedy Financial model
• Cost/Benefit of more robust offerings
• Cost/Benefit of improved Support
• Ease of use in understanding Price

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 Request for Proposals should have four strong

elements:

• A clear definition on required vs. optional product
• Volume information on all elements needed for each vendor

to come back with a common pricing proposal

• Technical /functional questions
• Specific SLA/support questions

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 Only add questions that will differentiate the

vendors, such as:

• Which products are yours vs. a third parties?
• How is support handled for third party products?
• Define any elements (hardware, volume related, etc.) of your proposal that

may cause us additional expense.

• What are the network bandwidth requirements?

 If the question will not help you differentiate between

vendors, don’t put the question in the RFP.

 Error on the side of fewer, more succinct questions.

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 How many people support product

development?

 What is your firm’s annual revenue?  Please put your financial proposal in the

following format…

 Describe your implementations process  How do you charge for add-on product?  Define your teller workflow

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 Decide early which vendors you send the RFP out

to, and then which will get a chance to demo.

 For every vendor, your entire team will need to:

• Review every response
• Sit through a 1-1.5 days of demo from each invitee
• Develop follow up questions

 3-4 vendors is optimal  Teams can not differentiate with too many choices

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 Try to even the playing field:

• Demos limited to 1 day per vendor
• All vendors get the same format, same amount of time to

demo

• All demos in the same week
• Make sure that demonstrators define which products are on

your “required” product list vs. optional bells and whistles

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 Functional teams should come prepared with any

questions that were not answered during the RFP.

 Assign a note taker/follow-up person from the

functional committees.

 Re-survey the committee to rank the vendors.  Start discussions on implementations and risk

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 Lay out all (3?) bids side-by-side  Build your own model- don’t rely on vendor

material

 Anticipate ~ 200 hours worth of modeling work for

your financial team

 Even the playing field financially:

• Separate IH from outsourced components
• Separate “required” vs. “optional” components
• Look for missing elements in each proposal

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 Review in a meeting with all decision makers:

• Survey results- product and tech gap analysis
• Define your ranking system
• Show score of each vendor
• Side-by-side financial models
• Implementation staffing and risks

 Try to walk out with a vendor decision

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 Your three proposals should give you a feel for the

differences in price structure

 Consider outsourcing the negotiation.  Understand how consultants can charge:

• Percentage of savings consultants
• Flat Rate consultants
• Offload all modeling work

 Don’t forget important terms and conditions

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$0.000 $0.200 $0.400 $0.600 $0.800 $1.000 $1.200 $1.400 $100M $200M $300M $400M $500M $600M $700M $800M $1B $1.1B

Per Unit Rate- By Client Size

ABC Bank XYZ Bank

 You should have analyzed earlier whether you had

the right bodies available for the implementation/conversion

 Consultants will also have PM help, if necessary  Anticipate a 6-9 month cycle

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Vendor Selection Framework

Technology/ Business Needs Assessment RFP Vendor Selection Contract Negotiation Implementation Tasks 1. Gap analysis and recommendat ions 2. Strategy assessment 3. Identity improvement

• pportunities

4. Determine functional requirements 5. Confirm vendors to evaluate 1. Create customized RFP clearly defining your unique needs 2. Prepare and deliver RFP 3. Vendor review sessions 4. Field all vendor questions as they complete RFP response 1. Compile RFP responses 2. Develop financial models 3. Assist in vendor due diligence 4. Facilitate selection decision 1. Develop issues list 2. Develop negotiation strategy 3. Update financial models with new pricing 4. Terms and conditions discussions 5. Negotiate with vendor 1. Smooth and timely conversion 2. Mitigate risk and member impact 3. Develop conversion plan 4. Participate in test planning 5. Ongoing project

• versight

6. Slipping task analysis 7. Post-conversion assistance Typical Time- frame 2-3 months 1-2 months 2-3 months 2-4 months 9-18 months

It has been mathematically proven that organizations are most efficient when people are promoted randomly.

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Two important questions in deciding when to start your core selection process:

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Vendor Selection Contract Negotiation Vendor Implementation Schedule

4-5 months If RFP is included 2-4 months Terms and Conditions 10-14 months 18-24 Months

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• Systems Selections
• Core Contract Negotiations
• Conversions- Project Management
• Technology Assessments
• Migration Analysis -IH vs Outsource

Charlie Kelly C: 312-270-3490 CKelly@RemedyConsult.net